How travelers shape the evolution of luxury, worldwide
Tourists make up one third of total sales in the luxury industry. In 2015, close to 30% of global luxury purchases were made by travellers, an increase of 3.5% year on year, according to a study released by direct digital marketing specialist ContactLab and Exane BNP Paribas.
Despite boutiques in Paris recording a radical drop in footfall over the last year, following acts of terrorism, the authors of the recent report believe fashion houses have reason to be optimistic because, “international spending on luxury goods is not too bad, compared to what they could be”.
Considered nations of great tradition, France, Italy and Spain continue to attract international shoppers, seduced by both a reduction in taxes and a weakened Euro, as well as a curiosity to see the birth place of the world’s most prestigious luxury brands.
Europe has become the main destination for luxury clientele, accounting for almost 40% of the market in the first semester of 2014, increasing its market dominance to close to 50% in 2016. However, Hong Kong and Macau are the biggest losers. While the two cities represented 30% of luxury purchases made by globetrotters in 2014, that number fell to 10% just two years later.
Japan and South Korea are looking like the new destinations for luxury. As for the Middle East, the Gulf region attracts customers from around the world as well, as shopping places prove popular with foreign buyers, particularly from Russia and China.
“In Europe, 70 to 80% of luxury market sales come from tourists”, said Massimo Fubini, CEO of ContactLab, who believes fashion houses should seize the opportunity over the summer holidays, “to engage with these clients”.
European sales are also supported by local customers, who favour the domestic market in 85-95% of cases, the study revealed.
France makes up 7% of the global luxury goods market, just like Italy and China, while the UK represents 6% and Spain, Russia and Brazil account for 1%, said the report.
Russians are still, despite the crisis that hit the country, the main luxury consumers when abroad (they will do 70% of their shopping overseas ), even if they spend less.
They are followed by the Chinese, where more than 40% of luxury purchases take place outside their borders. This overseas shopping equates for half of total tourist expenditure in this segment.
“According to our estimates, luxury expenditure – whether it be domestics or international, should increase by 5% in the first four months of 2016. The good news is that international shopping seems to be fairing well. Better still, Chinese spending in Europe appears to be increasing,” said the authors of the study.
“If this is the situation in the wake of the terrorist attacks in Paris in November 2015, we can reasonably expect an even more positive second half in 2016,” they concluded.